How is capital gains tax for 2025 calculated?
By: Andrea Riquier
USA Today
..... The capitol gains tax is a fairly straightforward concept, but as with everything related to the tax code, there are lots of nuances that can make it more complicated.
.....
It is what a taxpayer owes the government for their profit on the sale of an asset such as a home or stocks. Capitol gains refer to any profit made from acquiring an asset at one price and selling to at a higher price. It does not refer to any profits a person has on paper - that is, if they borough a stock and its value went up.
..... However, capitol gains taxes are not exclusive to t4he stock market. Anything considered a "capital asset" - that is, any investment that could raise in value and crate a profit - is taxable.
..... The tax applies to real estate, bonds, mutual funds (but usually not ETFs), MFTs and cruptocurrency and jewelry or coin collections.
..... The amount a person is taxes on capital gains depends on whether it's a long-term gain or a short-term one, as well as their income, The higher a person's income, the more they will have to pay in capital gains taxes.
..... A short-term capital gains tax is levied on the profits of investment that were sold after being held for a year or less.
.... They are taxes at the same rat4e as income. People can check the IRS tax brackets to determine the tax they pay for each portion of their income.
..... Long-term captal gains tax is applied to investments that have been held for more than a year before being sold for profit. They are generally taxed at a lower rate than short-term gains.
.....
The long-term capital tax rates for the 2025 tax year remain at 0%, 15% or 20%.
..... The rate is 0% for:
* An unmarried individual with a taxable income less than or equal to $49,450.
* Married people filing jointly with taxable income less than or equal to $98,900.
* A
married person filing separately with a taxable income less then or equal to $49,450.
* A heed of household with a taxable income less than or equal to $66,200.
..... The rate is 15% for:
* An unmarried individual with a taxable income between $49,451 and $545,500.
* Married people filing jointly with taxable income between $98,901 and $613,700.
* A married person filing separately with a taxable income between $49,451 and $ 306,850.
* A head of household with a taxable income between $66,201 and $579,600.
..... The rate is 20% for anyone whose taxable income is above 15% threshold in their category.